Cleveland Mining Company Ltd has acquired the 1,000km2 “Porto Grande” iron ore project in the Brazilian state of Amapá. The large, Greenfields tenement package is bounded by iron ore projects held by Anglo American and Cliffs Natural Resources, Brazilian super miners Mineração e Metalicos S.A and Vale.

Under the terms of the purchase agreement, Cleveland will make payments of US$0.4m and US$1.6m after 6 and 12 months respectively, following the cessional rights being transferred to Cleveland and environmental permits being published.

Cleveland will also pay the vendor 10c per ton against an indicated resource as at the completion of a Definitive Feasibility Study and make a 9% royalty payment quarterly against net profit after interest and before corporate taxation.

The tenement is located between Beadell Resources Ltd’s Tucano and Tartaruga projects. Outcropping hematite and itabirite mineralization has already been identified within the tenements during preliminary geological investigation.

Cleveland Mining Managing Director, David Mendelawitz, reiterated his past experience with iron ore projects globally, saying he is encouraged Cleveland Mining may have found a location that fits the structural and economic requirements of an emerging iron ore company.
 
Amapá is coastal, pro-mining, subject to sound legislation and taxation, and is politically stable, whilst having good infrastructure and access to low cost, yet skilled labor – all in association with high-grade iron ore, said Mr Mendelawitz.

According to Mr Mendelawitz, the first mining companies working in Amapá appear to be progressing very well. Anglo American produced around four million tons of iron ore within the region last year and has brokered an iron ore off-take agreement with ASX-listed Beadell Resources, he stated. Beadell Resources has delineated a multi-million ounce gold resource.

The Porto Grande project will be owned by Cleveland Mining Company Ltd’s Hong Kong subsidiary, Cleveland Mining HK Ltd. The iron ore project will operate and exist discretely from the Company’s Brazilian gold assets, which are held by Brazilian subsidiary company Cleveland Mineração Ltda.

The Company will maintain a division between the Iron Ore and Precious Metals Divisions to ensure that they are entirely self-reliant. It is anticipated that the iron ore subsidiary, Cleveland Mining HK Ltd., will be funded through capital raised in Asia directly into the subsidiary, later in the year, after initial exploration has occurred.

Funds will be raised in this manner to facilitate investment from the steel industry and to reduce potential equity dilution issues for existing Cleveland shareholders, whilst providing benefit through the continued ownership interest in Cleveland Mining HK.

20th April 2011